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Harley-Davidson took its tax cut, closed a factory, and rewarded shareholders . You got to love the spin put on this whole situation. What’s your thoughts?

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By James “Hollywood” Macecari Opinion Columnist

This article from VOX has been making its rounds on the internet today. Don’t know if it’s just being shared because it has Harley-Davidson in the title but maybe you should take a more thorough look at what’s being said.

The tax cuts aren’t saving jobs at Harley-Davidson

Well, maybe Ms. Wizard you would’ve done proper research. And Yes, leave the liberal BS out of the article and actually tell the truth. The overseas plant in Thailand was planned a year before President Trump came into office. Translated. Harley – Davidson had this whole thing with Kansas City planned the whole time.

Did you tell your readers this? No. Instead, you try and blame Trump for what moves Harley-Davidson already had planned. By the way, a liberal trying to report on the biker industry does not go together. Keep reporting on your Russia conspiracy. You liberals are good at printing garbage. Just leave the biker scene to the real people who know it.

Harley- Davidson is in trouble because of its leadership and poor design teams.

The trouble is not Harley- Davidson has its demographic aging out of the scene. The problem they have isthe company got away from its blue-collar base. The RUB invasion of the 90’s has finally started knee-capping the company. A motorcycle from the company used to be affordable. Now you have to take a second mortgage out to get a brand-new bike from Harley-Davidson. The idiots triggered a boom in the used sale market by catering to those who were at no time apart of the Harley base.

Another thing Harley-Davidson did to hurt sales was their designs tried to live off the sales of previous successes. The product line never changed up until now. The problem with that? It’s toolate for it. The metric companies used Harley-Davidsons weaknesses against them.They have built up their markets from the disenchanted who Harley-Davidson left behind when they chose the RUB generation.

Harley-Davidson took its tax cut, closed a factory, and rewarded shareholders

In September 2017, House Speaker Paul Ryan traveled to a Harley-Davidson plant in Menomonee Falls, Wisconsin, to tout the Republican tax bill, which President Trump would sign later that year. “Tax reform can put American manufacturers and American companies like Harley-Davidson on a much better footing to compete in the global economy and keep jobs here in America,” Ryan told workers and company leaders.

Four months later and 500 miles away in Kansas City, Missouri, 800 workers at a Harley-Davidson factory were told they would lose their jobs when the plant closed its doors and shifted operations to a facility in York, Pennsylvania — a net loss of 350 jobs. Workers and union representatives say they didn’t see it coming.

It’s a pattern that’s played out over and over since the tax cuts passed — companies profit, shareholders reap the benefits, and workers get left out. Corporate stock buybacks hit a record $178 billion in the first three months of 2018; average hourly earnings for American workers are up 67 cents over the past year. Harley-Davidson is an American symbol, and President Trump has trotted it out as an example of business success. But as it’s getting its tax cut, it’s outsourcing jobs and paying shareholders.

“I think you’re going to even expand — I know your business is now doing very well, and there’s a lot of spirit right now in the country that you weren’t having so much in the last number of months that you have right now,” Trump said. He added that impending changes to “taxing policies,” health care, tariffs, and trade would only make things better.

The tax cut, at least, came through. The Republican tax bill, which slashes the corporate tax rate to 21 percent from 35 percent, is giving Harley sizable tax savings this year. The company estimates its effective tax rate — the amount it pays — will be 23.5 percent to 25 percent this year, about 10 percentage points lower than it would have been without the tax bill.

That’s a significant savings: The company makes about $800 million to $1 billion in pre-tax profit, according to Seth Woolf, an analyst at North Coast Research.

Just over a month after Trump signed the tax cuts into law, the Kansas City closure was announced. Workers found out when they arrived at the plant that morning: They were kept in the hallway, informed that the factory would be shut, and sent home for the rest of the day without pay. The union had no advance warning, saidGreg Tate, a staff representative for the United Steelworkers District 11, which represents about 30 percent of the Harley-Davidson plant’s workers. (Harley-Davidson and the two unions that represent most of its production employees last year terminated their 22-year partnership agreement.)

“We really never had any belief that they were going to shut the Kansas City facility down,” Tate said. The announcement was “the first anyone found out about it.”

The company will cut 800 jobs at the Kansas City plant when it closes by the fall of 2019 and says it expects to add 450 full-time, casual, and contractor positions in its York facility — a net loss of 350 jobs.

The median household income in York is much lower than in Kansas City, and Tate said that hiring a casual workforce there — temporary workers brought in to boost production during peak season — will be easier and cheaper for Harley.

“This is a decision we did not take lightly,” Harley said in a statement. “The Kansas City plant has been assembling Harley-Davidson motorcycles since 1997, and our employees will leave a great legacy of quality, price, and manufacturing leadership. We are grateful to them and the Kansas City community for their many years of support and their service to our dealers and our riders.”

Harley-Davidson is also expanding overseas

Meanwhile, Harley-Davidson is opening up a plant in Thailand, where it plans to start production later this year. (The company also owns and operates facilities in India and Brazil, and it is closing a facility in Australia.) The company says the Thailand plant isn’t meant to outsource jobs but toboost its international business and avoid tax and tariff burdens. Trump’s proposed steel tariffs could pose a threat to Harley and add an estimated $30 million to its costs, and the European Union has threatened to impose a tariff on the company’s motorcycles in retaliation.

Union leaders, however, have suggested that the Thailand plant opening and the Kansas City plant closing are tied together.

“Part of my job is being moved to York, but the other part is going to Bangkok,” Richard Pence, a machinist at the Kansas City plant, told the Milwaukee Journal Sentinel earlier this month when in Washington as part of a meeting between House Minority Leader Nancy Pelosi and members of the Association of Machinists and Aerospace Workers, which represents about 70 percent of the Harley-Davidson workers being laid off.

The Kansas City plant closing will cost Harley up to $200 million through 2019, according to Bloomberg’s estimates, and should result in annual savings of $65 million to $75 million after 2020.

Tate, from the steelworkers union, suggested the tax savings Harley reaped from the GOP bill might have actually freed up the cash for it to go ahead with the US restructuring plan now. “They have the capital now to move Kansas City, to shut it down,” he said. “All of that money really came from the tax cut plan, so it kind of had the opposite effect of what it was supposed to do.”

Woolf, the analyst, said he wasn’t sure that was the case. “I think what this reflects is that they’re finally coming to grips with the fact that the US market is contracting,” he said. Harley-Davidson has been struggling in recent years — sales have declined as its core demographic, baby boomers, ages and as millennials shy away from big bikes. The decline has been particularly acute in the US: Harley-Davidson’s motorcycle sales declined 8.5 percent in the United States in 2017 and 3.9 percent abroad.

The tax cuts let Harley reward shareholders

Meanwhile, since the tax cut, the company is managing to reward shareholders. Just days after revealing the decision to shutter the Kansas City plant, the company announced a dividend increase and a stock buyback plan to repurchase 15 million of its shares, valued at about $696 million.

On a call discussing the company’s first-quarter results in April, chief financial officer John Olin indicated that shareholder primacy will continue. “Beyond what we invest in the business, we will return and continue to return all excess cash to our shareholders,” he said. The company this year shut the media out of its annual shareholders meeting.

Harley-Davidson is one of a string of companies to announce major share buybacks since the tax bill was passed in December. Apple in early May said it would buy back $100 billion of its shares. The tech conglomerate Cisco in February said it would put an additional $25 billion toward a stock buyback. Troubled megabank Wells Fargo in January announced about $22 billion in buybacks. Pepsi announced a $15 billion buyback, Amgen and AbbVie $10 billion, and Google’s parent company Alphabet $8.6 billion.

Harley-Davidson isn’t the only company to shutter a US plant since the tax cuts were passed in December. The same day Kansas City workers found out their plant was closing, about 900 workers at an Electrolux plant in St. Cloud, Minnesota, found out the facility they were working in would be shutting down too. The Swedish home appliance company will consolidate its freezer production in South Carolina, where Joe Baratta, a representative for International Association of Machinists (IAM) Local 623, told me starting wages are lower.

He described a recent trip to Home Depot. “I see products that we were building here last year that say ‘Made in China’ with the Frigidaire name on it, they’re already in stores,” he said. “It’s a tough pill to swallow to go into every store in town looking at a product and saying, ‘There’s 150 jobs we lost. There’s another 200 jobs we lost.’”

Since Harley-Davidson announced its Kansas City plant closure in January, Trump — who made a big deal of saving jobs at a Carrier plant in Indiana in 2016 — hasn’t had anything to say about it, even when asked. IAM President Robert Martinez Jr. sent a letter to the White House asking him to save the Kansas City facility in March.

“For decades, hard-working Machinists Union members have devoted their lives to making high-quality, American-made products for Harley,” he wrote, later adding, “America’s working men and women deserve better than being thrown out onto the street. Our nation deserves better.”

An IAM spokesperson said Martinez met with White House trade adviser Peter Navarro on April 11 about the Harley closure, and he promised to follow up with the company’s CEO. The union had not received an official response from the president.

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